The US dollar was firm after the meeting of the Federal Open Market Committee as the resulting statement was less dovish than market participants have expected. The greenback retained strength despite poor employment data.
The FOMC statement was rather optimistic:
The Committee sees the downside risks to the outlook for the economy and the labor market as having diminished, on net, since last fall.
Nevertheless, the Committee considered that it is too early to think about reduction of stimulus:
The Committee sees the improvement in economic activity and labor market conditions since it began its asset purchase program as consistent with growing underlying strength in the broader economy. However, the Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases.
The employment report from Automatic Data Processing showed growth by just 130,000 jobs in October that trailed the forecast of 151,000. Such data indeed does not give incentive for the US central bank to change policy, yet the dollar was not bothered by it.
EUR/USD fell from 1.3734 to 1.3726 as of 00:00 GMT today. GBP/USD went down from 1.6036 to 1.6028, while USD/JPY was flat at 98.48 following yesterday’s advance.
If you have any questions, comments or opinions regarding the US Dollar,
feel free to post them using the commentary form below.